A snapshot of the Australian food and grocery industry

Australia’s food and grocery sector contributes more than $100 billion a year in turnover to the national economy and employs about 315,000 people with half in rural and regional areas, according to a landmark new report by the Australian Food and Grocery Council (AFGC) and KPMG.

Launched by Federal Agriculture Minister Tony Burke in Canberra yesterday, the first-ever economic snapshot of the food and grocery sector called ‘State of the Industry 2009’ confirms the industry is Australia’s largest manufacturing sector, highlighting its importance to growing Australia’s economy.

The industry is currently made up of 38,000 businesses, spends about $3.8 billion a year on capital investment and accounts for $49 billion of the nation’s international trade.

AFGC Chief Executive Kate Carnell said the wide-ranging report highlights that the industry is one of the few manufacturing sectors in Australia that continues to grow and employ people during tough economic times.

“On a turnover basis, the report found Australia’s food and grocery sector is comparable in size to the Australian mining industry – and the sector is more than four times larger than Australia’s automotive industry,” said Ms Carnell who noted the “essential information” has not been previously available. “The industry employs more than 3 per cent of all employed people in Australia, paying salaries and wages of about $14 billion a year.”

Future challenges

With predictions that the world population will reach 9 billion by 2050 and Australia’s population is expected to hit 35 million by 2040, many experts believe that the world will need to double its current food production to meet these challenges in a carbon and water constrained environment.

“There are also some real challenges facing the industry including the increasing cost of energy, availability of water, rising imports and exports becoming more expensive with the strengthening Australian dollar,” Ms Carnell noted. “Having a robust and prosperous food industry provides many opportunities for Australia into the future including increasing job opportunities in rural and regional areas. Australia can play an important role in addressing future world food needs.”